Artificial intelligence (AI) stocks delivered another year of impressive returns for investors in 2025, as evident from the 30% jump in the Global X Technology and AI ETF — the largest AI-focused exchange-traded fund.
The sector fared well despite starting 2025 on the wrong foot for reasons that included trade wars induced by President Donald Trump’s tariffs and concerns about the huge amounts of money being spent on artificial intelligence infrastructure. Those concerns were amplified after Chinese tech startup DeepSeek claimed it had been able to train its large language model for a fraction of what companies like OpenAI have been spending.
Following their notable gains over the past year, most of the top AI stocks (names like NVIDIA, Palantir, Broadcomand Snowflake – trade at expensive sales multiples, high earnings multiples, or both. However, there is one AI stock that can be bought at an incredibly cheap valuation right now, despite being up 250% in the past year: Micron technology (NASDAQ:MU).
Here’s why this semiconductor company could be the cheapest buy of 2026.
For a company that reported a 57% year-over-year increase in revenue and a 167% increase in non-GAAP (adjusted) earnings in its most recent quarter, an earnings multiple of 27 is a great bargain. Even better, Micron anticipates that in the current quarter, its revenue will increase 132% year over year to $18.7 billion, and its adjusted earnings will increase more than fivefold.
Therefore, Micron’s valuation suggests that the market has not yet fully priced in its growth potential in the stock. Consensus estimates project its earnings to nearly quadruple in its next fiscal year to $32.14 per share. Not surprisingly, Micron has a forward earnings multiple of just 9, well below the tech multiple Nasdaq-100 Forward price-earnings (P/E) ratio of the index of 26.
If the market decides to reward Micron with a higher multiple and it trades at a forward P/E in line with the Nasdaq-100 average after one year, its stock price could soar markedly. More importantly, Micron is able to meet Wall Street’s earnings expectations.
Demand for memory chips is far outstripping supply. A significant portion of the available high-bandwidth memory production is being implemented in AI accelerator chips, such as graphics processing units. As a result, there is a shortage of memory chips used in smartphones and personal computers. This shortage has caused a massive increase in memory prices.